Paul is going to receive $35,000 eight years from now. Peter is going to receive
ID: 2799994 • Letter: P
Question
Paul is going to receive $35,000 eight years from now. Peter is going to receive $35,000 five years from now. Which one of the following statements is correct if both Paul and Peter apply a 8 percent discount rate to these amounts?
The future values of Paul and Peter's monies are equal.
In future dollars, Paul's money is worth more than Peter's money.
None of the above.
The present values of Paul and Peter's monies are equal.
In future dollars, Peter's money is worth more than Paul' money.
The future values of Paul and Peter's monies are equal.
In future dollars, Paul's money is worth more than Peter's money.
None of the above.
The present values of Paul and Peter's monies are equal.
In future dollars, Peter's money is worth more than Paul' money.
Explanation / Answer
In Future Dollars, Peter's moeny worth more than Paul's Money.
Because the Money the paul's receives at 5th year will invested at 8% for 3 years and by the year 8 he will have more amount than Peter's $35000